President Jalal Talabani said the new government was both a good omen and a warning, in a speech broadcast live on TV.

"It provides a good omen to our people that the government will achieve for them security, stability, peace and prosperity.

"It also provides a warning to the... terrorists and the murderous criminals that the hand of justice will get them, sooner or later."

Mr Maliki will for now run the interior ministry and Deputy Prime Minister Salam Zaubai, a Sunni, will run defence.

Another key post is oil minister, which has been taken by Hussain al-Shahristani, a Shia nuclear physicist jailed and tortured by former leader Saddam Hussein.

'New chapter'

The new unity government is the result of five months of arduous negotiations, following December's general elections, in which the Shia alliance emerged as the largest single bloc.

The future of democracy in Iraq now lies in the hands of the Iraqi people

Margaret Beckett,UK foreign secretary

It is the first to include the main Sunni Muslim factions, which had boycotted the interim elections and cabinet.

International leaders welcomed the development.

US President George W Bush said it opened a new chapter for Iraq, but great challenges still lay ahead.

The UK's Tony Blair described it as a huge step forward and called on the international community to "get behind the Iraqi government".

Arab League Secretary-General Amr Moussa said the move was "a step on the right path" toward restoring security and stability in Iraq.

Continuing violence

But with security the key issue, correspondents say in the short term the new government is unlikely to affect what is a complex breakdown of law and order, involving Sunni insurgent groups, Shia militias and mafia-style criminality.

The labourers were having breakfast when the blast hit

Hours before the parliament began its session, at least 19 people were killed and 58 wounded in a bomb attack in a Shia district of the capital, Baghdad.

Witnesses said the blast in Sadr City happened at about 0700 (0300 GMT) near a food stand where day labourers seeking work were having breakfast.

In other violence, a suicide bomber killed at least five people and injured 10 in an attack on a police station in the western border town of Qaim.

Sectarian violence has spiralled in recent months. The latest cycle began with the bombing in February of a Shia shrine in the town of Samarra.

It was followed by the regular reports of the discovery of dumped bodies, bearing marks of torture and execution.

Sunni politicians said Shia death squads operating within the security forces were behind the killings.